Key financial reporting areas for 30 June 2025 reporters

In this article we highlight some of the key financial reporting areas that preparers of 30 June 2025 financial statements will need to be aware of.

Luckily, many of these relate to areas that we have addressed in detail in previous articles, so the link for these is provided in addition to the summary below.
 

Recently announced tariffs by the United States of America (USA) and continuing global geopolitical and economic uncertainty, including the impact of interest rate increases and inflation, may also affect how to account for certain items at 30 June 2025. 

It is important that entities don’t immediately dismiss the effect of tariffs merely because your entity does not export to the USA, as these tariffs have the ability to significantly affect the wider economy resulting in reducing revenues and/or increasing input costs, via:

  • Higher unemployment.
  • Lower consumer consumption.
  • Inflationary pressures

Our previous article (click here) summarised nine key areas to consider when determining how tariffs may affect your organisation, that were covered in more detail in BDO’s global bulletin publication (click here).

The  amendments to NZ IAS 1 Presentation of Financial Statements, include that: namely:

  1. The right to defer settlement need not be unconditional and must exist at the end of the reporting period.
  2. Classification is based on rights to defer, not intention.
  3. For convertible loans where the conversion feature is classified as a liability (rather than equity), if the conversion option permits the holder to convert the loan to shares at any point prior to maturity, the underlying liability in its entity must be classified as CURRENT.

Regarding (a), if your entity has loan arrangements subject to covenants, the amendments clarify when the covenants affect classification at the reporting date. 

This is illustrated in the diagram below.

Changes in the criteria for current vs non-current classification of liabilities

Assessing whether the entity must comply with a loan covenant before the reporting date may depend upon whether the lender has provided a “waiver” or a “period of grace”. 

BDO’s global in practice publication (click here) provides a detailed flowchart and numerous examples to help you determine the correct classification of your loan arrangements.

Due to the recent spike in inflation around the globe, more and more country’s economies are considered to meet the requirements to be considered “hyperinflationary”.

For entities (subsidiaries) operating in these “hyperinflationary” economies, a specific NZ IFRS standard, NZ IAS 29 Financial reporting in hyperinflationary economies, must be applied (including retrospectively for any comparative periods to be presented).

The accounting requirements of NZ IAS 29 can be complicated and are significantly different from the status-quo.

Accordingly, entities (with subsidiaries) operating in hyperinflationary” economies will need to take care in preparing their year-end financial statements.

The full list of current hyperinflationary” economies (as at May 2025) can be found in BDO’s global bulletin publication (click here), and is reproduced below:

Which economies are considered hyperinflationary as at 30 June 2025

Economies that ceased being hyperinflationary in 2025

Economies that became hyperinflationary in 2025

Economies that have a risk of becoming hyperinflationary (watchlist for 2025 onwards)

  • Argentina
  • Burundi
  • Ghana
  • Haiti
  • Islamic Republic of Iran
  • Lao People’s Democratic Republic
  • Lebanon
  • Malawi
  • Sierra Leone
  • South Sudan
  • Sudan
  • Suriname
  • Turkey
  • Venezuela
  • Ethiopia
  • Burundi

 

  • Angola
  • Egypt
  • Myanmar
  • Nigeria
  • Syria
  • Zimbabwe

Entities preparing Tier 1, full NZ IFRS financial statements must disclose details of the anticipated effect of new and amended standards issued but not effective.

Entities should note that the longer a new and amended standard has been issued, and/or the closer it gets to effective date, the more that regulators like the FMA expect an entity to disclose about their impact assessments, what stage it is at, and findings to date.

In particular, the FMA tends to take a “poor view” of entities that include blanket statements such as “Management are yet to fully assess the impact of [insert standard name here]”.

Of the new and amended standards issued but not effective listed below, the one that has been getting the most commentary from firms, the XRB, CAANZ, and the FMA is NZ IFRS 18 Presentation and disclosure in financial statements.

Despite only being effective from 1 January 2027, the fact that comparatives will need to be restarted, and where there are impacts this will likely require system changes (including but not limited to general ledger re-mapping), the expectation is that entities will already be assessing the impact so that they can implement, test, and then roll out these system changes at the beginning of the comparative period (i.e., from 1 January 2026), and then begin informing stakeholders of the impacts they can expect to see.

Entities should, therefore, start their NZ IFRS 18 implementation projects now in order to be ready to retrospectively restate comparatives from 1 January 2026.

Our comprehensive In Practice publication will help you on your NZ IFRS 18 implementation journey.

For more details, including our "Six steps to a successful adoption of NZ IFRS 18," please refer to our Adopting NZ IFRS 18 page, and please contact our Financial Reporting Advisory team for assistance in your entity’s adoption journey of NZ IFRS 18.

The complete list of new and amended standards issued but not effective as at 30 June 2025 is detailed below:

Standard number

Topic

BDO resources

Effective for annual periods commencing

NZ IFRS 18 

(New standard)

Presentation and disclosure in financial statements

In Practice publication

1 January 2027

NZ IFRS 9

NZ IFRS 7

(Amendment)

Amendments to the Classification and Measurement of Financial Instruments 

  • The appropriate date for derecognising financial assets and liabilities (e.g., electronic bank transfers)
  • Application guidance to clarify the ‘SPPI test’ (i.e., loans with ESG-linked features).

Bulletin publication


1 January 2026

NZ IFRS 9

NZ IFRS 7

(Amendment)

Contracts referencing nature-dependent electricity 

(i.e., Power-purchase agreements (“PPAs”) -incl.: Pay-as produced; Baseload; Pay-as-consumed; Shaped)

Bulletin publication

1 January 2026

NZ IAS 21

(Amendment)

Lack of exchangeability

Bulletin publication

1 January 2025

Annual improvements

(Amendment)

Narrow-scope clarifications, simplifications, corrections and changes aimed at improving the consistency of several IFRS Accounting Standards, for the following standards:

  • NZ IFRS 1 
  • NZ IFRS 7
  • NZ IFRS 9
  • NZ IFRS 10
  • NZ IAS 7

-

1 January 2026

For 30 June 2024, changes to NZ IAS 1 Presentation of Financial Statements became effective, which required further streamlining of accounting policies, such that only “material” accounting policy information is required to be presented. 

As was done previous by some entities back in 2016 under the International Accounting Standards Board’s (IASB’s) Disclosure Initiative, we saw several entities in 2024 provide wholesale “decluttering” updates to their financial statements by, for example:

  • Presenting information in an orderly and logical manner
  • Placing notes in a meaningful order (including the use of subsections)
  • Moving accounting policies, and disclosures on judgements and estimates, to their relevant financial statement notes
  • Removing superfluous accounting policies (and immaterial notes to the financial statements).

However, many entities did not take advantage of this change, an accordingly many regulators, Auditors, and Boards of Directors are requiring finance teams to undertake and “decluttering” assessment of their entity’s financial statements and propose appropriate changes to be made.

Our article from November 2023 provides additional information.

Please contact our Financial Reporting Advisory team for assistance in your entity’s “decluttering” assessments.

Need help

Please contact our Financial Reporting Advisory team for assistance in any of the areas addressed above.

For more on the above, please contact your local BDO representative.

This article has been based on an article that originally appeared on BDO Australia, read the original article here.